Chesapeake Energy Corp. investors must wait until June 5 to have a judge consider requests to delay the company’s annual meeting so shareholders can gather more information on Chief Executive Officer Aubrey McClendon’s financial dealings, according to court filings.
U.S. District Judge Vicki Miles-LaGrange in Oklahoma City, Oklahoma, agreed yesterday to reschedule the hearing on shareholders’ arguments that the natural-gas producer’s June 8 annual meeting should be put on hold. Investors contend that McClendon’s compensation and loans he arranged to cover his costs in a well-ownership program may have created conflicts of interest.
The Oklahoma City-based company’s shares have dropped 48 percent in the past year. The effect of falling gas prices has been compounded by McClendon’s use of personal stakes in the company’s wells to obtain loans.
As of Dec. 31, McClendon, 52, had $846 million in loans covering his well-ownership costs. The program, which allowed him to own as much as 2.5 percent of almost every well the company drilled, required the CEO to pay development costs proportionate to his stake.
Chesapeake’s lawyers countered in court filings that investors already have a wealth of data about McClendon’s financial dealings and can’t make the case that the annual meeting should be delayed.
The case is Deborah G. Mallow IRA SEP Investment Plan v. McClendon, 12-cv-436, U.S. District Court, Western District of Oklahoma (Oklahoma City).